Examination of Witnesses (Questions 180-184)
14 NOVEMBER 2007
DEPARTMENT FOR
CULTURE, MEDIA
AND SPORT
AND OLYMPIC
DELIVERY AUTHORITY
Q180 Mr Williams: In that case, the
provision for the contingency at that stage should have been even
higher because of all the unknowns, should it not?
Mr Stephens: I come back to the
point that in the detailed and expert analysis which the Department
commissioned and took into account, which was available across
Government, there was risk analysed, contingency built in project-by-project,
but no suggestion that over and above that there should be a programme
contingency fund.
Q181 Mr Williams: It was the same
with the security side. We are told that the provision made for
security was, in fact, only site security during the construction
phase. There was no provision whatsoever for security during the
Olympics. Had anyone ever mentioned Munich to you?
Mr Stephens: Had anyone mentioned?
Q182 Mr Williams: I will spell it
out to you: M-U-N-I-C-H. There was a little incident there some
years ago.
Mr Higgins: The bid did include
costs for running the Olympic security during the Games within
the Olympic Park. That is covered for in the local budget.
Mr Stephens: If I may say so,
my predecessor, the Accounting Officer at the time, wrote to the
Committee at the time of the bid and she said: "While an
allowance of £190 million for security costs has also been
made, which is covered by the Olympic budget, the Home Office
consider that there may be wider costs associated with policing
and counter-terrorism. At present it is not possible to quantify
these wider costs precisely". That was brought to the attention
of the Committee at the time.
Q183 Mr Williams: No, no, what was
the last word?
Mr Stephens: " ... not possible
to quantify these wider costs precisely"
Q184 Mr Williams: "Precisely".
So it was possible to calculate. It may have been wrong but there
could have been a calculation. You did not even make a calculation
because you only took in the construction phase. Why did you not
make a calculation at the beginning? I come back to my original
question on this issue: had you not noticed what happened at Munich
some years ago?
Mr Higgins: If I could clarify
the scope of the security. There are three areas of security.
To cover your issue of Munich, the cost of securing the Olympic
Village and the Games venues during Games time is a LOCOG cost,
is budgeted for and was always budgeted for. The cost of security
of the Games venues and infrastructure during the construction
of the Games and up until handover to LOCOG during the 60 day
period of the Games is covered within the ODA allowance and there
always was a budget. There was a budget of some £190 million
allowed for at the time of the bid. That has been increased since
then but there always was an allowance. The cost that we are talking
about, the £600 million, is a cost to cover the other security
costs which are covered by Home Office or Met Police outside the
Olympics. That covers the arrival of dignitaries and securing
the rest of UK and London during Games time. That is a Home Office
and a Met Police cost. These are for covering major events, whether
it be G8 or a Wembley Final. These costs are obviously substantial
because of the size and scale of the Olympics. That is the issue
which was notified to the Committee, that these were unknown at
the time. They are difficult to determine even now.
Mr Williams: From where I am sitting
this smacks of convenience rather than competence. Thank you,
Chairman, my time is up.
Chairman: I think that last line of questioning
sums up what has been a difficult afternoon for you, Mr Stephens,
and I think you can expect a critical report from this Committee.
It seems to me that you, or rather your predecessor, grossly underestimated
the entirely foreseeable costs and it would have been a lot better
if you had taken the public into your confidence at the time.
Thank you very much.
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